COMPANY

Florida Hospital Chain Accused of Conspiring to Hike Payments

January 24, 2014

Every day the scorecards went up, where they could be seen by all of the hospital’s emergency room doctors.

Physicians hitting the target to admit at least half of the patients over 65 years old who entered the emergency department were color-coded green. The names of doctors who were close were yellow. Failing physicians were red.

The scorecards, according to one whistle-blower lawsuit, were just one of the many ways that Health Management Associates, a for-profit hospital chain based in Naples, Fla., kept tabs on an internal strategy that regulators and others say was intended to increase admissions, regardless of whether a patient needed hospital care, and pressure the doctors who worked at the hospital.

This month, the Justice Department said it had joined eight separate whistle-blower lawsuits against H.M.A. in six states. The lawsuits describe a wide-ranging strategy that is said to have relied on a mix of sophisticated software systems, financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid by admitting patients like an infant whose temperature was a normal 98.7 degrees for a “fever.”

For H.M.A., the timing could not be worse. Shareholders recently approved the planned $7.6 billion acquisition of the company by Community Health Systems, which will create the nation’s second-largest for-profit hospital chain by revenue, with more than 200 facilities. The deal is expected to be completed by the end of the month.